Lag in digital marketing
Companies cite complexity, smaller budgets
By Inman News, Monday, February 1, 2010.Real estate companies have been slow to embrace online marketing, according to a survey by Brandeis University's International Business School and digital marketing firm inSegment, Inc.
According to the National Association of Realtors, 90 percent of homebuyers start their real estate search online. The survey, a "Digital Marketing Survey of the U.S. Real Estate Industry," conducted in 2009 and released this month, found that 76 percent of surveyed companies commit 40 percent or less of their marketing budgets to digital marketing, preferring traditional venues like newspapers and display ads.
The survey covered three hundred companies nationwide in investment, commercial and residential real estate. The survey was conducted through confidential phone interviews of key decision-makers in each of the companies, according to inSegment.
More than half of participating companies (58 percent) did not run search-engine marketing campaigns. Of those who do search-engine marketing, 33 percent do not invest in search-engine optimization.
"There is nothing surprising about the fact that all real estate consumers are on the Web. This is true for just about every industry. What is surprising is that while Google generates approximately 3 billion unique daily searches, only a small minority of real estate players are tapping into the opportunity in a serious way," said Oleg A. Vyadro, inSegment's founder and principal, in a statement.
The survey found that 23.5 percent of companies believed that between 60 and 80 percent of consumers began their search online, and 37.5 percent believed between 40 and 60 percent of consumers did so.
More than half of participants (53 percent) expect to increase their digital marketing budget in the future, the survey also found, while 37 percent plan to keep it at the same level and 10 percent plan to decrease their digital marketing budget.
Companies cited reduced marketing budgets and the "complexity" of digital marketing as the main reasons for the discrepancy.
Among the top marketing objectives in next five years for participating real estate companies: 42.5 percent seek to increase their brand awareness, 35 percent seek to increase return on investment of their marketing budget, and 22.5 percent seek to solicit new clients.
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Submitted by Riley Stephens on February 1, 2010 - 7:06am.
Contrary to what Mr. Vyadro says ALL real estate consumer are not on the Web. They use the Internet as a starting point and during their search for real estate just as many of us use the Internet to search for many things - having often learned about the website we visit from another source. A balanced and effective marketing budget would include many outlets - including traditional non-digital means. That may be why only 40% of those surveyed commit funds to digital marketing. From my own experience 1/3 of our web users come directly to our site having learned about our site from a non-digital source. If they are really looking for brand awareness, return on investment and new clients then a marketing plan that includes 40% to digital may be about right.
Submitted by Jake Marinioo on February 1, 2010 - 11:28am.
Riley,
I find it odd that you start your comment by stating that not all real estate consumers are on the web, then follow-up by stating that they use the web as a starting point. Seems a tad bit contradictory, don't you think?
You next say that a balanced and effective marketing budget should include many outlets -digital and non-digital, and that this may be why only 40% commit funds to digital. Is this an intentional non sequitur, or just another misstep?
Perhaps you should read your comment out loud before posting, because you're making much sense here.
Submitted by Evan Cadell on February 1, 2010 - 2:39pm.
The fact that 1/3rd of your site's visitors are direct logins who've seen your print advertisements does not reflect buyer behavior internet-wide.
Rather, it can only reflect your marketing budget. If you only advertise in print, all of your site visitors will come from print. If you don't advertise on the radio, none of your visitors will come from radio. Print, radio, billboards etc all try to reach the largest possible population in the hopes that it will contain a subset of people already looking to buy, and generate a desire to buy in others.
Advertising on a search engine is totally different: your ad only appears when users proactively search for a product you sell. The searcher says "I want X." Your ad says "we have X." They become a site visitor and see that you do indeed have X. Obviously this is far more powerful than trying to convince them they wanted X in the first place.
Seen with this difference in mind, the point Mr. Vyadro is making takes on more importance: online marketing offers real estate sellers the chance to start a conversation with buyers within minutes of their decision to start looking at homes. What website entry path could be more valuable?
Submitted by Jerzy (George) Szkup on February 1, 2010 - 2:41pm.
George Szkup
www.DestinationTucson.biz
It is assumed and probably correct that large number of potential buyers start their house search on the web. Deducting from this that they will buy from the initial contact on the web is not supported by any credible research.
Most likely these prospects will buy from a local agent that they shall meet through "conventional" method of advertising (or that they already know).
George in Tucson
Trulia - http://bit.ly/4tgwkU (Q&A, Blog/posts, Resume)
www.Destination Tucson – http://bit.ly/2Bnb3f (Monthly Blog)
Twitter - http://bit.ly/e3mCI (Georges’ Tweets)
Submitted by Riley Stephens on February 1, 2010 - 6:28pm.
If only 40% of those surveyed utilize digital marketing there’s a reason for this. Maybe they've found a disconnect between the oft sited "90% start their search online" and real response to their digital advertising. Maybe they simply feel it is too "complex". Maybe they perceive the need - or have discovered the effectiveness - of a broader, more diverse marketing mix.
As marketers, are we missing an opportunity and should we commit more to digital marketing since "all real estate consumers are on the web"? Possibly - but commit more to digital marketing because it works and provides you with the ROI you demand. In my view, an assumption that the internet is the only place to market and advertise is failing to recognize that while the internet may be the starting point for lots of real estate search, it’s not - nor should be - the only point of possible contact with clients and prospects. Maybe those surveyed understand this.
Submitted by Gahlord Dewald | Thoughtfaucet on February 2, 2010 - 7:08am.
I found it interesting that only 35% of the execs named increasing return on their investment as a top objective of marketing.
I think if we start from that position, then it makes sense that the methods/channels/etc are ones where ROI and message optimization are difficult to determine.
If no one is looking for a return from their marketing spend, then why not stick with traditional media?
(Obviously, I'm not so sure I think that's the best approach, but maybe it is for those business execs).
G. Dewald | Thoughtfaucet
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